One Year Later, Results Of Stimulus Mixed
One Year Later, Results Of Stimulus Mixed
On the anniversary of President Obama's $787 billion stimulus, three stories show how the funds affected a physician assistant, a youth outreach program and a wind turbine plant. In addition, an examination of its impact and public opinion reveals mixed results on both fronts.
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A year ago on Feb. 17, President Obama sat down at a borrowed desk in a Denver museum and signed the "American Recovery and Reinvestment Act," a massive government stimulus program designed to jump-start the ailing economy.
A year later, the economy is working again. But millions of Americans are not. The mixed track record of the stimulus has shaken confidence in the Obama administration, even as the president pushes for additional jobs measures.
"I don't want to pretend that today marks the end of our economic problem," Obama said when he signed the $787 billion bill last February. "But today does mark the beginning of the end — the beginning of what we need to do to create jobs for Americans scrambling in the wake of layoffs."
In a phrase that foreshadowed the ambiguity of stimulus results, the president said the measure would "create or save" some 3.5 million jobs over the next two years.
"And we expect you, the American people, to hold us accountable for the results," he said.
Both the White House and the Congressional Budget Office say thanks to the stimulus, something like 2 million people are working who otherwise wouldn't be. But that's like trying to climb up a down escalator. Unemployment still topped 10 percent last year. And there are some 3 million fewer people working now than when the president raised his stimulus pen.
On the plus side, the economy, which had been shrinking at a rapid rate, is growing again, and monthly job losses have slowed to a trickle. Christina Romer, chairwoman of the president's Council of Economic Advisors, said the stimulus deserves credit for arresting the economic freefall.
"Remember back to what it was like a year ago when we were losing almost 800,000 jobs a month, when we were seeing GDP plummeting, rather than rising as it has for the last two quarters," Romer said.
Private economists largely agree that the stimulus has helped to cushion the recession's blow. But the general public is not convinced. And Republican lawmakers, who almost unanimously opposed the stimulus, happily encourage those doubts. A poll by the Pew Research Center found more people think Obama's policies have worsened the economy rather than made it better.
One explanation for this underwhelming appraisal is that the stimulus just wasn't big enough to combat a recession that so far has claimed 8.4 million jobs. Romer reportedly believed a year ago that a bigger stimulus was needed. She said the White House took what Congress would allow.
"I think we did what we could and it was very effective," Romer said. "I think what the president is talking about now is we need to do more, because he does think the American people deserve that."
Politics drove not only the size of the stimulus but also its shape, with a heavy reliance on tax cuts, even though direct government spending is generally thought to deliver more economic bang for the buck.
"About a third of this package comes in the form of tax cuts — the most progressive in our history, not only spurring job creation, but putting money in the pockets of 95 percent of hard-working families in America," Obama boasted a year ago.
But according to a new CBS poll, only 12 percent of Americans believe Obama cut their taxes. Instead of going out in a highly visible, lump-sum check, this cut simply left a little more money in workers' paychecks. Behavioral economists say that's the best way to encourage people to spend their stimulus rather than stashing it away. But any political payoff was largely lost.
"Would I have liked to hire somebody to knock on everyone's door like the Publishers Clearing House guys with the big check and the balloons? Sure," said White House spokesman Robert Gibbs. "Maybe it would have had a greater effect."
The Obama administration is still paying a price for its marketing missteps. Rightly or wrongly, the president's first big initiative is widely seen as missing the mark. That perception has made everything Obama tried to do since the stimulus that much harder.